China's car sales boom, reshaping a way of life
QUFU, China -- This city is a symbol of China's past — the birthplace 2,500 years ago of the revered philosopher Confucius, a town where ancient temples still stand and the gas station sells time-honored Chinese delicacies such as chicken feet and tea eggs.
Even here, though, cars are suddenly everywhere — honking constantly, speeding through the city's medieval gates, crowding pastthe horse-drawn carts and rickshaw cycles that have had Qufu's roads mostly to themselves.
"We never used to have traffic jams," sighs Song Wenjun, 63, who founded the local brewery. Song says just a year ago, his chauffeur-driven Buick moved easily through the city of 60,000, hindered only by its four stoplights. Now, he says, there are more than 20 lights and the roads are packed.
China's love affair with the automobile is thriving despite the global recession, and it's changing the way people live here in ways reminiscent of the USA's boom in car ownership after World War II. Song's story helps explain why: His Sun King brewery has struggled lately, but its workers are still confident enough about their future to buy cars that are becoming increasingly reliable, safe and cheap — often less than $6,000 for a basic, new model.
Song says more than 100 of the brewery's 2,000 employees have recently purchased their first cars, joining millions of other Chinese who, for the first time, are able to enjoy a middle-class lifestyle comparable to many Americans.
The booming sales have provided a glimmer of hope for beleaguered American auto companies that make and sell cars here. That includes General Motors, which saw its sales in China jump 75% in May compared with the year before.
GM says China now accounts for nearly 25% of its global sales. With no end in sight to the troubles in the U.S. auto market, GM, Ford, and Chrysler likely will become increasingly reliant on China's still largely untapped market, says Yale Zhang, a Shanghai-based analyst for CSM Worldwide, an auto industry group.
"If you want to grow your overall volume, this is where you need to invest," Zhang says.
China is on track to sell 11 million vehicles this year, according to the China Passenger Car Association. That would be up 17% from 2008, and a stunning 20 times the number of vehicles sold in China just a decade ago. Zhang says this year China likely will overtake the USA, where expected sales are around 10 million units, and become the world's biggest car market for the first time.
China's 1.3 billion people "are simply wild about cars," says Michael Dunne, a Shanghai-based managing director of J.D. Power and Associates, an auto industry group. He says the surprising strength of China's auto market has been driven not just by economics, but also by a kind of psychological shift that has come with prosperity.
